Some investors use the word CD and money market interchangeably. There are differences between CD and money market. First of all A CD or certificate of deposit is not a marketable security which means that if a certificate of deposit holder wants out of his or her certificate of deposit or wants to redeem his or her certificate of deposit, he or she will have to contact the bank that issued the certificate of deposit and redeem the certificate of deposit with them. Usually, if the certificate of deposit holder wants out of the certificate of deposit before the maturity, he or she will have to pay some redemption penalty. In another word, unlike the stock market, there is no market of ready buyers of certificate of deposits.

Money market, however, is a marketable security. If a holder of a money market wants to cash out and redeem all his or her money from the money market, he or she can do so immediately without having to go back to the original issuer of the money market. There is a market for the money market. Redemption of money market is fast and pain free.

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